Correlation Between JPMorgan Chase and Alfi

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Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and Alfi at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining JPMorgan Chase and Alfi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPMorgan Chase Co and Alfi Inc, you can compare the effects of market volatilities on JPMorgan Chase and Alfi and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in JPMorgan Chase with a short position of Alfi. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Alfi.

Diversification Opportunities for JPMorgan Chase and Alfi

-0.81
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between JPMorgan and Alfi is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Alfi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfi Inc and JPMorgan Chase is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on JPMorgan Chase Co are associated (or correlated) with Alfi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfi Inc has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Alfi go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Alfi

Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 0.09 times more return on investment than Alfi. However, JPMorgan Chase Co is 11.49 times less risky than Alfi. It trades about 0.13 of its potential returns per unit of risk. Alfi Inc is currently generating about -0.17 per unit of risk. If you would invest  13,068  in JPMorgan Chase Co on September 5, 2022 and sell it today you would earn a total of  448.00  from holding JPMorgan Chase Co or generate 3.43% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

JPMorgan Chase Co  vs.  Alfi Inc

 Performance (%) 
       Timeline  
JPMorgan Chase 
JPMorgan Performance
11 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, JPMorgan Chase revealed solid returns over the last few months and may actually be approaching a breakup point.

JPMorgan Price Channel

Alfi Inc 
Alfi Performance
0 of 100
Over the last 90 days Alfi Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in January 2023. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Alfi Price Channel

JPMorgan Chase and Alfi Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with JPMorgan Chase and Alfi

The main advantage of trading using opposite JPMorgan Chase and Alfi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Alfi can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Alfi will offset losses from the drop in Alfi's long position.
JPMorgan Chase vs. East West Bancorp
The idea behind JPMorgan Chase Co and Alfi Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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Check out your portfolio center. Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Transaction History module to view history of all your transactions and understand their impact on performance.

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